Multifactor Productivity Measurements Model (MFPMM) as Effectual Performance Measures in Manufacturing

Abstract:     
The main objective of this study is to compare the productivity measures typically used in manufacturing plants with the currently available theories of productivity measures. The study focuses upon the shortcomings of current measures and scope of improvement. It aims to determine the significance of introduction of the modern techniques. A case study has been carried out in a manufacturing plant. The existing productivity measures are analyzed and observed that the plant does not have proper and systematic productivity measures to monitor the productivity performance. Multifactor Productivity/Performance Measurements Model (MFPMM) is applied to monitor the productivity levels. Productivity measurement in the plant was assessed using six criteria - validity, completeness, comparability, inclusiveness, timeliness, and cost-effectiveness. As more criteria are met, the results of the measurement become more meaningful. Analysis on current productivity measures reveals that the present measures are far behind from being adequate and the firm faces a low productivity level. The MFPMM has the scope to portray the firm’s performances in a comprehensive manner. The study attempts to provide an insight into productivity measurement and analysis, and improvement activities, including the phase of productivity measurement, and evaluation of the productivity level applicable in a manufacturing plant. The research identifies performance/productivity measure related shortcomings and their causes in a typical manufacturing plant and suggest solutions to overcome that. The ideas presented may be applied to other manufacturing settings.

Number of Pages in PDF File: 10

Keywords: productivity, productivity measurement, MFPMM, manufacturing

JEL Classification: L6

Accepted Paper Series